The People vs. Alcoholic Beverage Wholesalers: Why It’s Getting Harder to Ship Alcohol Across State Lines

            Granholm only took us so far.  In 2015, UPS and FedEx announced they would no longer accept shipments of alcoholic beverages from retailers if the goods were not bound for one of fourteen states that explicitly allows such exchange in response to a crackdown by state regulators.[1]  This is a sharp departure from prior practice. 

            Before 2015, state laws requiring a license to ship across state lines were technically on the books.  But they went unenforced, and their interpretation was up for debate.  Retailers shipped alcohol much more freely over state lines, creating enormous opportunities for alcoholic beverage retailers to expand their customer base considerably by fulfilling out-of-state orders over the internet.  This was good for consumers, too.  A family hosting a dinner party in rural Missouri who wanted to serve Walla Walla Riesling could order a few bottles directly from a Seattle retailer, paying the cost of shipping for the privilege.

However, a coalition of alcoholic beverage wholesalers, led by Wine and Spirits Wholesalers of America (WSWA), has been systematically lobbying states and the federal government to favorably interpret these statutes and enforce them against interstate alcoholic beverage shippers.[2]  

WSWA is a formidable foe.  The industry group has nearly 400 member companies, representing 80% of the wholesale market.  It enjoys tax-favored 501(c)(6) nonprofit trade association status.[3] 

Daniel Posner, owner of a White Plains wine retailer and President of the National Association of Wine Retailers discussed the fracturing effect on the retail sector, allowing wholesalers to further consolidate their industry power.[4] 

Craig Wolf, President and C.E.O. of WSWA, defended the industry group’s motivations, citing their interest in consumer protection.  Mr. Wolf insisted the tighter regulations would reduce counterfeiting and curtail underage drinking by teens ordering alcohol over the internet.[5]  Mr. Posner countered, telling the New York Times that “this is pure greed.”[6] 

Regardless of whether there is a legitimate health and safety concern associated with allowing retailers to ship their wares across state lines, state regulators are not doing their constituents any favors.  They are protecting out-of-state interests at the expense of retailers back home, and distorting the alcoholic beverage market in the process.  This is not effective governing.  Sit down, state representatives, you’re drunk. 

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[1] Eric Asimov, Wines are no longer free to travel across state lines, The New York Times, Oct. 23, 2017, https://www.nytimes.com/2017/10/23/dining/drinks/interstate-wine-sales-shipping-laws.html?_r=0.

[2] Id.

[3] Wine and Spirits Wholesalers of America Website, www.wswa.org.

[4] Asimov, supra n. 1.

[5] Asimov, supra n. 1.

[6] Asimov, supra n. 1.